Friday, November 25, 2011

Softwood lumber export tariffs

Exports of BC softwood lumber to USA have hit another bump in the road. US lumber producers are claiming that salvage stumpage prices for harvesting lodge pole pine affected by mountain pine beetle are unrealistically low and amount to a government subsidy. The case has gone to the London Court of International Arbitration.

Softwood lumber disputes and vulnerability to discriminatory tariffs or export taxes has been affecting the BC forest sector for almost thirty years. The problem centers on the administered prices that the BC Government charges forest corporations for logs from public forests. Timber volumes are allocated to forest companies, so there is no real open market, just administered prices. The system is vulnerable to claims of subsidy. The problem started thirty years ago because forests in the USA were recovering from previous exploitation and American lumber producers were eager to get a larger share of their own market.

Canada and BC have decided to live with the problem rather than fix the problem and remove vulnerability to discriminatory tariffs or taxes completely. Government is acting in the interests of forest corporations rather than the BC public or our forests. To reduce vulnerability to discriminatory export tariffs, public timber needs to be sold on an open market. To institute a truly open market, the government would have to take away timber it has allocated to forest corporations. Forest companies would still have access to timber but they would just have to buy it at open market prices.

Local Forest Trusts operating on a business basis could sell wood on an open market and reduce BC vulnerability to discriminatory export taxes. Management of BC's public forests would be independent and accountable to a local democratically elected board. Money that would otherwise be lost to discriminatory taxes or under pricing would flow back to the stewardship of the forest.

The failure of BC Government administrations to solve this problem for thirty years indicates that the interests of corporations come before the citizens of BC and the stewardship of their public forests.

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